It was predictable: The “stimmy” rally in Chinese equities would be seen, in hindsight, as just another in a long series of false dawns and head fakes.

From September 23 to October 8, a period that included a holiday on the mainland, Chinese stocks rallied a truly ridiculous 35% amid a bevy of policy promises and allusions to multi-faceted stimulus aimed at resuscitating a dying domestic consumption impulse.

I warned repeatedly during that stretch that a lot of the bets on local shares were hot money that’d hit the exits at the first sign of trouble or even just if authorities in Beijing failed to detail the specifics of demand-side stimulus measures in a timely manner.

Fast forward two months and the rally in China has stalled entirely. As the figure below shows, local equities have gone exactly nowhere since early October.

On Friday, mainland shares suffered their worse drop in weeks. I’d say traders were selling the news, but that’s just it: There was no news. Or, more to the point, a summary of high-level deliberations at the Central Economic Work Conference was long on pledges and rhetoric and short on specifics.

The Party, Xinhua said, will “lift consumption vigorously” in 2025. Reviving domestic demand is at the top of the agenda, and to that end, the deficit will be wider and the Party will work hard to ensure no one falls through the proverbial cracks. And yadda, yadda.

To be clear: China never releases forecasts nor budget specifics for the upcoming year in December. For that, the market has to wait until March. So, no one expected to get the numbers — any numbers — on Thursday, when Xinhua summarized the CEWC. Indeed, it’s not clear what investors expected, and if they expected anything at all other than the usual nebulous talking points, well then “fool me once,” as the old adage goes.

Still, the suspicion that Xi Jinping might not know what he’s doing — that there may not be a plan — is growing with each passing week, and that trepidation’s showing up in bonds.

As the figure shows, 10-year yields in China are now below 1.80%. It’s just record low after record low after record low. Those are deflation bets. China’s freezing over.

We learned this week that the government’s going to borrow more, run a larger deficit and ease monetary policy in 2025, but we already knew all that. If you actually parse the rhetoric since September, you’ll be hard pressed to make the case that officials have said anything new at all in three months.

Again: The lack of specifics is nothing new for the Party, and some have suggested China’s just demonstrating its penchant for patience and careful deliberation at a particularly delicate juncture, and as The White House changes hands. But there’s a fine line between wisemen cogitating and deer in headlights. The Standing Committee’s starting to look suspiciously like deer.

Note that credit data for November, released on Friday, betrayed a woeful miss on the new yuan loans headline. Banks offered just CNY580 billion worth last month, around half the CNY1 trillion consensus expected. Without wanting to catastrophize, that looked like a disaster.

The growth rate for the outstanding loan stock slipped to just 7.7%. It was north of 13% four years ago.

Over and over again since 2021, China balked at big-ticket fiscal stimulus, relying instead on slow-drip monetary easing. Although the PBoC indicated in September that the spigot would be opened, by then they were pushing on a string: You can lower the cost of credit (make money cheaper), but you can’t force people to borrow.

Apropos, if your strip out loans to financial institutions, lending to the real economy was the weakest last month for any November since the financial crisis.

Bloomberg on Friday quoted George Boubouras, head of research at K2 Asset Management, who weighed in on the plunge in Chinese benchmark government bonds yields: “0% [is] a possibility,” he said.